By Mary Johnson, editor
The announcement of the annual Social Security cost-of-living adjustment (COLA) for the following year is like watching Charlie Brown trying to kick a football. Charlie Brown, our beloved cartoon character by Charles Schultz, gets talked into kicking off a football by the diabolical Lucy. Just as Charlie runs up to the football giving the kick everything he’s got, Lucy pulls it right out from under him, and Charlie Brown winds up falling flat on his back.
We all are a lot like Charlie Brown. The Social Security COLA is the football and our “Lucy” is the diabolical measure that our government uses to adjust benefits for inflation. Over the past 11 years, COLAs have been pulled out from under beneficiaries no fewer than four times, and this year it will feel that way for millions of people. TSCL believes that tens of millions of retirees simply won’t receive a COLA high enough to pay the entire increase in their Part B benefits. For most of these people the Part B premium will be adjusted for 2021 and there will be no change in net Social Security benefits from 2020, but they will pay more in future years to catch up.
Even though the promise of the COLA is to protect the buying power of Social Security benefits from erosion due to climbing costs, Social Security benefits have lost 30% of their buying power from 2000 to 2020.
COLAs have averaged only 1.4% since 2010, but that wasn’t always the case: from 1990 to 2009, COLAs were more than twice as much — 3%. So how much more would retirees have received if COLAs had averaged 3% since 2009? The benefits of people who have been retired since that year would be almost 20% higher today. For example, COLAs have increased an average monthly benefit of $1,075 in 2009 to $1,249.30 in 2020. But had the COLA been a more typical 3%, that benefit would be $1,496.70 today, an additional $247.40 per month! A 3% COLA would have increased overall Social Security income for this benefit level by $18,227.
This is sobering, and why enactment of legislation that would ensure the COLA is no lower than 3% is so important for every Social Security recipient. Do you agree? Sign a petition to Congress for a fair cost of living adjustment for Social Security at www.SeniorsLeague.org.